27th Edition
WARREN + 5 others
ISBN: 9781337272094




27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Employee net pay

Marsha Mellow’s weekly gross earnings. for the week ended May 23 were $l,250, and her federal income: tax withholding was.$201,65. Assuming that the: social security rate: is 6% and Medicare: is 1.5% of all earnings, what is Mellow's net pay?

To determine

Gross pay: The total amount such as salary, wages, commissions, overtime, and bonus paid by the employer to an employee in each pay period is called as gross pay.

Net pay: It is the remaining amount of gross pay after all deductions.

To compute: Compute Ms. M’s net pay.


Calculate Ms. M’s net pay as below:

Particulars Amount Amount
Gross pay $1,250.00
Withholding deductions:
Federal income tax $201.65
Social security tax(1) $75.00
Medicare tax(2) $18.75
Total withholding deductions $295.40
Net pay (take-home) $954.60

Table (1)

Working notes:

Calculate withholding social security tax...

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